Class struggle intensifies in China

Eugene Puryear

June 11, 2010

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Workers demonstrate outside the Honda factory in Zhongshan, China.

Since mid-May, Japanese automaker Honda has faced a series of strikes in its Chinese operations. These high-profile strikes have started a discussion in the capitalist financial press as to the future of the Chinese economy, the rights of workers, and the

attitude of the Chinese Communist Party to both of these.

The initial strike, which was resolved June 4, saw workers at a transmission manufacturing plant in Guangdong Province go off the job demanding higher wages and improved working conditions. After two weeks on strike, the workers received wage increases of between 24 and 34 percent.

The strike was essentially a wildcat action. The workers elected their own representatives and negotiated directly with Zeng Qinghong, the general manager of Guangdong Motors, Honda’s state-owned partner.

The trade union that nominally represented the Honda workers played a negative role, attempting to undermine the workers’ struggle. In an open letter, representatives of the Honda workers stated their desire to re-organize the union, with direct elections of their representatives.

Rising workers’ wages

The strike is indicative of a trend of increasing wages for workers across China, both in response to and in fear of widespread labor unrest. Foxconn, one of China’s largest electronics manufacturers, which made news when a number of its workers committed suicide, announced wage increases of 33 percent. In a recent survey of Hong Kong manufacturers by the Hong Kong Trade Development Council, 70 percent of those responding reported wage increases of 17 percent on average over the past six months.

Additionally, while in the past the media have been reluctant to report on worker unrest, major media outlets like Xinhua and the People’s Daily carried reports on the strike, and published articles calling for improvement in wages and working conditions.

It has been widely publicized that the Chinese government is pursuing a “re-balancing” of its economy, to rely more on domestic consumption and less on exports. Higher wages across the board could help that process along, as it will enable China’s huge working class to buy more consumer goods.

Moreover, China’s rebound from the 2008-2009 recession as well as new industrial construction in formerly undeveloped areas of the country have resulted in serious labor shortages, strengthening workers’ bargaining power.

Higher wages across the board is not an immediate harbinger of a decline in foreign investment inside China. The same HK TDC report notes that 46.2 percent of Hong Kong manufacturers will continue to open factories in the Pearl River Delta, and 12.7 percent in the Yangtze River Delta. Only 6.2 percent preferred Vietnam, and only 3.1 percent favored Indonesia.

Imperialist policymakers in the United States and Europe, concerned about the weakness of the global economy and increasing competition from Chinese industry, continue to demand the revaluation of the yuan to reduce China’s trade-balance advantage over the United States. In May, China’s trade surplus was $20 billion. They also want to see higher domestic consumption inside China, to promote more imports from foreign companies. At the most recent G20 meeting, U.S. Treasury Secretary Tim Geithner noted that higher consumption in China will be a prime mover in a full economic “recovery.”

Massive capitalist development

Since 1978, capitalism has developed on a massive scale inside China. Advocates of the policies of the Mao-era have been sidelined, imprisoned and sometimes killed. The dominant elements in the bureaucracy who control the CCP and the government, however, did not dismantle the socialist system in the same way as occurred in the former USSR.

They have sought to maintain the shell of the socialist state, to maintain their own privileges and control over the rising capitalist class, with which they have increasingly co-mingled.

If the Honda strike is a sign of broader action by the working class, this precarious unity inside the Chinese state could shatter.

The CCP is a mammoth organization and widespread worker protests and strikes will elicit different responses from different elements. In a country where the rhetoric and knowledge of socialism is widespread, massive protests could move very quickly past questions of wages to questions of ownership and collective property rights.

In 2003, scholar Feng Chen studied worker protests against industrial restructuring from state-owned to privately owned enterprises. He points out that workers showed a sophisticated knowledge of property rights. He writes in part:

“Workers challenge managerial decisions to change the form of property ownership without their consent, claiming that SOEs are public property and that they have legitimate rights to it.”

Opportunity and challenge

Current labor disputes seem to have not gone beyond the basic issues of wages and working conditions. This provides the CCP with an important opportunity and a complicated challenge.

If the party embraces the workers’ just demands, it will win their support and allegiance. Workers will see the CCP as their organization. If the party opposes the workers demands, it throws the door wide open to the CIA and counter-revolutionary organizations to demagogically posture as the true leaders of the Chinese workers in their struggle for higher wages and better working conditions. This makes the country vulnerable to real counter-revolutionary initiatives.

Because the economic development strategy of the CCP, as a ruling party, has been to open the country to direct investment by foreign capitalists, new contradictions are inescapable. The CCP invited the foreign capitalists into the country. The goal was to accelerate development and acquire technology. In return, the foreign capitalists could exploit Chinese labor and make mega-profits by paying low wages.

But now Chinese workers are feeling more confident, and they are standing up and striking for better wages against these foreign capitalists. This is a fork in the road for the CCP. Its orientation toward the working class will be ultimately decisive.

Also, the prospect of a mass struggle against capitalist exploitation can help shift China’s policy and orientation. The CCP has the capability to alter its course by slowing or reversing the concessions made to foreign capitalist corporations. There is no way to know in advance how this struggle will play out, but one thing is certain: The class struggle will intensify in China as it will everywhere.

The CCP still has a deep reservoir of support, and the most important thing will be for the party to reorient its policy toward winning the allegiance of its historic base of support: the workers and peasants of China.